Homeowners warned against extending payment breaks
UK Finance has written to the Financial Conduct Authority to warn that it would not be in the best interests of homeowners to allow borrowers to extend a three-month holiday on repayments to up to six months. The trade body said, "around 60% to 70% of customers can demonstrate affordability to resume full payments at the end of their current payment deferral". There are concerns borrowers could run into difficulties when faced with the bigger interest bills while banks worry they will be accused of failing to provide enough information when customers sought an extension, leading to a rush of complaints.
The Financial Conduct Authority has warned that banks and brokerages are facing increased risks around the handling of sensitive information due to the rise of home working as a result of the coronavirus pandemic. “Given market uncertainties and changed working arrangements, issuers need to be extra vigilant about the possibility of leaks and rumours, and identify whether there has been a breach of confidentiality”, the FCA said.
COVID-19 lockdown brings surge in digital banking
The take-up of digital banking in Yorkshire has accelerated since the start of the COVID-19 lockdown, according to new research from Virgin Money. Almost three in 10 people have downloaded a mobile banking app since the lockdown began, while 53% said they plan to use branches and face-to-face banking less after the lockdown ends.
Extra £7m in capital boosts Hampden & Co
Edinburgh-based private bank Hampden & Co has secured a £7m capital injection from its key investors to support balance sheet growth, costs and regulatory requirements. The bank is said to have been working closely with clients to "mitigate the impact of COVID-19 by providing liquidity and refinancing loans".
HMRC widens powers to seize illicit funds in banks
HMRC has increased its use of account freezing orders and their associated account forfeiture orders as part of the tax authority’s campaign to crack down on illicit financing.
Brussels seeks power to borrow €750bn to fund virus recovery
European Commission president Ursula von der Leyen is urging EU capitals to agree to allow Brussels to borrow €750bn (£672bn) on international markets to finance a recovery from the coronavirus pandemic. The plans unveiled by von der Leyen came after Christine Lagarde, European Central Bank president, warned that the eurozone’s economy would shrink by 8 to 12% this year.
Goldman delays digital wealth management push
Goldman Sachs has opted to delay a push into digital wealth management because of the coronavirus pandemic.
Finance dries up as global banks reassess trade risks
The IMF and World Trade Organization have sounded the alarm over sharp drop in the availability of trade finance as international banks reassess risks and local lenders struggle to access dollar liquidity.
Renault, Nissan and Mitsubishi announce moves to increase cooperation
A new strategy to boost cooperation in developing and producing cars has been announced by Renault, Nissan and Mitsubishi as the manufacturers seek ways to mitigate the effects of the coronavirus pandemic. Shares in Renault were up almost 16% on the news, with Nissan up 5.5% and Mitsubishi 2.27%.
Boeing prepares to sack 13,000 staff
Boeing is to lay off 12,000 US workers as the company reels from a slump in demand due to the coronavirus pandemic. Over 600 will lose their jobs in Australia, New Zealand and Canada with more layoffs expected to be announced, The jet manufacturer said last month to slash that it would have to slash its global workforce by 10% - or roughly 16,000 jobs.
Ryanair reports increase in bookings
Ryanair’s Michael O'Leary has announced that the firm has seen “a big surge in bookings on our flights out of Ireland and the UK to Spain, Portugal and Italy over the weekend, and that seems to be continuing this week,” as he urged the UK to abandon the quarantine measures it intends to introduce from June 8. He also said he was “reasonably confident” that its aircraft would be 50% to 60% full when it resumes flying in July.
Pension bodies release guide to steer public through savings crisis
The Department for Work and Pensions, the FSCS, the Pensions Regulator, the FCA, the Money and Pensions Service, the Pensions Ombudsman and the PPF have collaborated to produce a Q&A guide for savers detailing all the protections that are in place to shield savers from financial harm during the pandemic. Guy Opperman, the pensions minister, said: "We're doing whatever it takes to ensure people are supported through these unprecedented times and this guide is a useful addition to the measures pension bodies have already taken to assist savers."
St James’s Place reports increase in net inflows for April
A rise in net inflows in April has been reported by wealth manager St James’s Place, with £810m last month comparing with £800m during the year-earlier period. Overall in the first quarter the firm reported gross inflows of £5.2bn, an increase from £5bn last year. Chief executive Andrew Croft stated: “We are encouraged by the robust gross and net inflows we have continued to experience during May, though the short to medium-term impact of government measures and economic volatility on our flows remains uncertain.”
M&G buys adviser platform from Royal London
Fund manager M&G has agreed to acquire £14bn-in-assets adviser platform Ascentric from insurer Royal London, allowing M&G to sell its funds and insurance products to more retail savers. M&G is also pressing ahead with a bumper £410m cash return to its shareholders, despite regulatory scrutiny of dividend payments. John Foley, chief executive of the insurance and fund management business, said that it would “do the right thing by our shareholders” by following through with both its ordinary and special payouts.
Provident Financial reports improved volumes
Sub-prime lender Provident Financial reported a sharp drop in business volumes in April after lending standards were tightened "significantly" as a result of the COVID-19 outbreak. However, shares rose 6.4% on news there had been "signs of a modest recovery" during May and that the lender was in a strong liquidity position.
Japan broker to ‘crowdsource’ ideas for new activist fund
Japanese online brokerage Monex is to launch a new fund called “The Future of Japan” fund, with ideas on how to challenge corporate leaders to be “crowdsourced” from retail investors.
Stripe continues European expansion
Payments firm Stripe is expanding into the Czech Republic, Romania, Bulgaria, Cyprus, and Malta, bringing its international presence up to 39 countries. The firm completed a $600m funding round last month.
Sanofi sells half of its Regeneron stake for $6.1bn
Sanofi has sold half of its stake in US pharmaceuticals group Regeneron in a $6.1bn deal that will fuel acquisitions and new drug development.
MEDIA & ENTERTAINMENT
News Corp announces Australia job losses
Hundreds of positions at News Corp Australia could be cut as the firm embraces a digital-only model for many of its local and regional papers. Executive chairman of News Corp Australasia, Michael Miller, warned that the “inevitable” job losses could affect 30% of staff. The company is also consolidating operations in titles including the Telegraph, the Herald Sun and the Courier Mail.
Service sector suffers steep drop in optimism
The CBI’s quarterly review has found confidence in the services sector is declining at a record pace with companies struggling with declining sales, mounting costs and weak cashflow. Optimism about the general business situation slumped to -79% among business and professional services firms, the worst figure since the financial crisis. The index for consumer services firms fell to a record low of -86%.
Hammerson chief executive announces resignation
Retail landlord Hammerson has announced that chief executive David Atkins is to step down after a decade in the role. He stated: “The current environment, exacerbated by the impact of COVID-19, is undoubtedly the most challenging we have faced as a business. I feel now is the right time to search for a new chief executive, a person who can not only lead the business as we emerge from this period, but also into its next chapter.” The firm also said it had received only 37% of the rent it was owed in the second quarter so far, and has recently suffered the collapse of a £400m deal to sell seven shopping malls to private equity company Orion.
British Land announces decline in retail portfolio value
Shopping centre owner British Land has seen the value of its retail portfolio fall by over 25% as a result of the coronavirus. Chief executive Chris Grigg remarked: “Like businesses around the world, in recent months our focus has been on responding to the unprecedented challenges brought about by COVID-19,” announcing that the firm had lost some £2m in rent by giving a three-month payment holiday to smaller retail, food and beverage, and leisure customers.
Bailey: BoE’s pandemic measures are working
Writing in the Guardian, the governor of the Bank of England, Andrew Bailey, says Britain is entering the second phase of the coronavirus crisis with the lockdown lifting gradually and businesses starting to open up again. “There are reasons to believe that economic activity will return at a faster pace than in many past recessions, but this depends on how the measures continue to be eased, what degree of natural caution is shown by people, and how much longer term damage is done to the economy. The risks are undoubtedly on the downside for a longer and harder recovery.” The measures taken by the Bank were working, adds Bailey, who continues: “The Bank stands ready to do whatever we can to help UK firms and households in this economic disruption and get through this together. This is our duty.”
Coronavirus accelerates shift away from cash
The FT considers the effect of the coronavirus on cash, with more businesses moving to contactless payments and concerns raised over remote locations losing their access to coins and notes.